It’s inheritance that is immoral, not inheritance tax

Please humour me and try a quick thought experiment. You’ve got a million pounds and need to decide how best to spend it. You can’t just keep it yourself and you can’t gift it to anyone you know personally.

A couple of possibilities have been suggested to you: perhaps you could use it to pay the salaries of 60 new special needs teaching assistants at particularly under-resourced primary schools. Alternatively, maybe you would like to split the amount between a successful 35-year-old barrister named Jemima and her 32-year-old accountant brother, Edward.

Jemima would like to use most of her £500,000 to sell her current London zone 3 flat and move to a bigger home in a more exclusive postcode. She’d probably put the rest in an ISA, and maybe also splash out on a trip to St Lucia with her partner for a fortnight or so.

Edward lives in Luton and has a £250,000 mortgage on a four bed detached property that he’s keen to pay off. He’s also got his eye on a new Mercedes that is a little bit out of his usual price bracket. Anything left he’d use to add to his portfolio of shares. He doesn’t usually have big bucks to spend, but playing the markets is kind of a hobby for him.

You’ve probably already figured out where I’m going with this, and it’s likely you’ve also got your explanation of why I’m wrong rehearsed and ready:

“It doesn’t matter what you, or I, think would be the best use of the £1,000,000, because it isn’t our money to decide. That’s the crux of the matter.

“The £1,000,000 inheritance belongs to Jemima and her brother because, when their last remaining parent passed away, she left it them in her will. Their mother and father had already paid tax on the money when they were alive, so why should they pay it again now they are dead?”

Despite that fact that only the wealthiest 6% of estates are currently subject to inheritance tax, polls consistently show that most of us oppose it. 59% of people in the UK consider tax on inheritance unfair and only 22% say they believe it’s fair (the other 19% aren’t sure).

VAT, which places a disproportionate burden on people with low incomes, is much more popular. Only 39% think it is an unfair tax and 40% believe it is fair.

So why exactly are the majority of the population so hostile to a tax that is only paid by a wealthy minority, and which will never affect most of those who oppose it?

In modern times, most people agree that tax should ideally facilitate transfer of wealth from those who ‘have’ to those who ‘need’. Public spending is messy and complicated, but the overall redistributive flow is from the relatively rich to the comparatively poorer.

Justifications for not aiming to totally eradicate inequality between rich and poor often have both moral and practical elements. Usually, central to both is the idea of reward:

  • People morally deserve to be rewarded for being good at their job (through some combination of effort, education/socialisation and natural ability).
  • A functioning society needs to offer financial rewards to encourage people to work hard and be successful.

Capitalist logic says that that the income people receive, whether it’s profit or a paycheck, reflects the value they offer in return. An individual’s pre-tax income is therefore believed to rightfully belong to them.

Tax is seen as a necessary evil that should be minimised as far as possible whilst still ensuring the state has the resources to fulfil its necessary functions. A lot of mainstream disagreement centres on what the necessary functions of the state actually are and exactly how much is needed to fund them.

A lot of people probably haven’t consciously thought about the issue in much detail. Nevertheless, the belief that you ‘get out what you put in’ (at least to some extent) is widespread.

Absolutely none of this actually applies to Jemima and Edward and their £1,000,000 inheritance, of course.

Morally speaking, they haven’t done anything to earn that money. An accident of birth placed them in a wealthy family and they’ve benefited from that their whole life. Private schools, comfortable housing, parental connections and many other perks have given them a much better chance of having a successful, lucrative career than someone born into poverty.

Yes, they’ve still had to work hard. To borrow a computer game analogy, that doesn’t change the fact they’ve basically been playing life in easy mode.

There’s also no incentive-based argument for letting people inherit wealth. If anything, a sudden windfall would only reduce a person’s desire to accumulate money through actual hard graft. Quitting their job is the first thing many lottery winners do, and who can blame them?

“Ah,” you’re probably itching to tell me. “But this isn’t really about Jemima and Edward, or indeed any non-fictional people standing to benefit financially from the death of wealthy relatives. It’s about the dead people and what they wanted.”

It’s occasionally suggested that not being able to pass wealth onto offspring after death could make a person less incentivised to work hard whilst still alive. Providing for their family in the present day presumably no longer mattering if leaving a massive lump sum in a few decades is off the cards.

I honestly struggle to believe anyone actually believes such an obviously ridiculous claim.

The moral argument is much more common and seemingly much more convincing to many people.

Jemima and Edward’s parents, Margaret and Reginald, left a will stating exactly what they wished to happen to their estate after they passed away: they wanted to leave it all to their beloved daughter and son.

Let’s ignore Maggie and Reg’s hypothetically murky, privileged family histories (for now) and assume their financial situation prior to death was entirely the result of their own hard work and ability.

Why shouldn’t they be allowed to make decisions about what happens to their property after their passing? It’s theirs, after all. And if they’ve already paid tax on it, why should dying mean they get taxed again?

(I feel like I should mention the taxing twice thing because it’s something argued by so many people, even though it makes no real sense. Lots of transactions are taxed. Do you not pay VAT because you’ve already paid income tax?)

You’ll probably, hopefully agree that it’s sensible that we don’t let people posthumously vote in future elections according to what their alive self decided they wanted to do by proxy after death.

Partly, I suppose, as they can’t know what might happen to change their hypothetical future mind. But mainly because it’s just not really any of their business.

They’re not here anymore. They’re not part of our society. They physically do not exist as a living, breathing human being.

Dead people don’t experience any of the repercussions of their decisions, whether positive, negative or neutral, because they no longer experience anything. Not in this realm anyway, which is the only one I have the information to concern myself with.

They. Are. Dead.

We tend to respect people’s wishes about their own funeral arrangements as a social norm, but that’s really more for those of us left behind. It’s comforting for mourners to give someone the send off they ‘would have wanted’. There’s no evidence that the individual who formerly occupied the body in the casket is in any way, shape, or form aware of what’s going on.

There’s no scenario in which the hypothetical desires of someone no longer here to actually have them should be prioritised over the needs, interests and opinions of people still very much alive.

If a Jehovah’s Witness said she didn’t want her son to have a blood transfusion, should that preference be taken into account after her death? Should doctors have to fight her ghost in court to administer life-saving treatment to the child, or should decisions about his best interests be made exclusively by living people?

Hopefully, that read to you as a rhetorical question.

Dead people making decisions that affect living people is absurd. So is the idea of a dead person owning property to make decisions about.

The people who matter when we’re deciding what to do with £1,000,000 that no longer belongs to anyone (because a dead person owning something is absurd) are all of the people alive right now, and to some extent those who haven’t been born yet.

Jemima and Edward, yes, but also literally everyone else on the planet. Certainly, everyone else in the same country.

Margaret and Reginald were UK citizens, so it’s the UK state that has a claim to their estate once they pass away. That’s what can happen now if someone hasn’t left a will, and we’ve already established that a dead person’s preferences are totally irrelevant anyway. It’s the living that matter.

Any argument that the state shouldn’t assume control of the money is meaningless unless it also includes a suggestion of a better alternative.

Jemima and Edward have no moral claim to the money they didn’t earn. If they’re to get it, it needs to be justified based on consequences. Returning to the thought experiment at the start of this article, who could really believe that the best possible thing you could do with £1,000,000 is to give it to a couple of affluent, successful 30-somethings?

‘Taking’ the money from them wouldn’t be the immoral act, giving it to them would be.

Inheritance isn’t only immoral because it is a waste of resources that could be better spent elsewhere — on schools, health, social care and any number of other things. It’s also actively harmful to allow wealth to be passed down in families through the generations.

It’s harmful because it’s promoting inequality that can be justified neither morally nor pragmatically.

It doesn’t make society function better if some people are born into privilege and others into poverty. In contrast, it tends to mean you end up with important roles filled not by the most able, but by the most able from within a small pool of candidates with lots of social advantages.

People have no intrinsic claim to the fruits of their ancestors’ labour. Even without inheriting, Jemima and Edward have already benefited extensively from being born into money. Nobody could reasonably argue that is because they’re somehow more deserving than a person brought up in social care, for example.

Instead, we tend to justify this inequality based on the idea that Edward and Jemima’s parents have the right to do what they want with their wealth because it morally belongs to them. If that includes giving their children advantages others don’t have, so be it.

But what if Reginald and Margaret were also born into money, and had better life chances than most of their generation? Is their wealth truly morally theirs to do what they want with if this is the case? Maybe they inherited themselves, and were able to use that money to invest and generate even more wealth.

Despite the talk about social mobility from all major political parties, how rich a person in the UK is likely to be as an adult is massively dependent on the circumstances they are born into. Inheritance plays a huge, very obvious role in this.

People who already have money are much better equipped to make more money. As inheritance is passed down from generation to generation, wealth becomes more and more concentrated in certain families.

Just giving the £1,000,000 to two random people who grew up in poverty would still be preferable to letting Jemima and Edward have it. They already benefited enormously from their parents’ wealth while they were still alive. If they benefit again, the inequality is only amplified.

A compassionate case could perhaps be made for maintaining a small inheritance allowance, so people could hold on to items of sentimental value.

Beyond that, the only morally sound option is to redistribute in a way that benefits the majority, and particularly the least fortunate, rather than further enhancing the privilege of the most fortunate 6%.